This month the company amended its $1.55bn unsecured revolving credit facility due 2022 with Nordea Bank, New York Branch as administrative agent, its $1.925bn unsecured revolving credit facility due 2024 with The Bank of Nova Scotia as administrative agent and its $1bn unsecured term loan due 2022 with Bank of America, NA as administrative agent.
Among other things, these amendments extend the waiver of the quarterly-tested fixed charge coverage and net debt to capitalization covenants in each credit facility through the third quarter of 2022 or, if earlier, the date falling after Jan. 1, 2022, on which the company elects to comply with the modified covenants.
In addition, the way such covenants are calculated was modified — temporarily in certain cases and permanently in others — as well as the levels for testing the net debt to capitalization covenant during the period immediately following the waiver period and continuing through the end of 2023.
The amendments also increase the monthly-tested minimum liquidity covenant to $500m for the duration of the waiver period, subject to reduction to $350m if the company raises at least $500m of additional capital.
With these amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through Q3 2022.
Finnvera amendments for Icon-class ships
As previously disclosed, during the third quarter of 2020, Royal Caribbean Group amended its export credit-backed facilities to extend the period during which a breach of financial covenants will not trigger a mandatory prepayment or default, and including the fourth quarter of 2021. In connection with these amendments, the company agreed that certain subsidiaries — none of which directly owns a vessel — will issue guarantees for the debt under export credit facilities.
Further, this week Royal Caribbean Group entered into amendments to certain export credit facilities guaranteed by Finland's export credt agency, Finnvera, including those to purchase of the first, second and third Icon-class ships for Royal Caribbean International. The ships are contracted at Meyer Turku.
These amendments provide for the issuance of the previously agreed guarantees in satisfaction of obligations under the financial covenant extension amendments. The guarantees will be released under certain circumstances as other debt is repaid or refinanced on an unsecured and unguaranteed basis.
In connection with the guarantees of the Finnvera facilities, the guarantor subsidiaries are restricted from issuing additional guarantees in favor of lenders (other than those party to the export credit facilities), and certain guarantor subsidiaries are restricted from incurring additional debt.
In addition, the Finnvera facilities will benefit from guarantees to be issued by intermediary parent companies of subsidiaries that take delivery of any new vessels financed with export credit-backed financing.
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